A battle over the role of municipal utilities in a deregulatedenergy market apparently stands in the way of final approval ofcomprehensive energy deregulation legislation in New Jersey.Tuesday, the state senate approved the bill, S5, containing anenergy deregulation package that would force the state’s gasindustry to allow supply competition statewide starting Dec. 31,and statewide electric generation competition starting August 1.The senate passed the bill by a margin of 28 to seven with threeabstentions and two senators not present. The bill then made itsway to the general assembly where, late Tuesday night, thelegislators amended it and sent it back to the senate.

The problematic issue is whether to allow municipal aggregationof customers by ordinance or require a referendum. The generalassembly’s versionof the bill requires a referendum. “It is not adeal-breaking difference,” said Steve Montovano, an Enronrepresentative covering the situation, “but some legislatorsapparently want to change it. It’s a see-saw battle right now. Theassembly amended the bill to look like something they want, and nowthe senate is trying to get the votes to get this thing through.”

One source close to the vote said that this hold-up could causeproblems. “Speaking as somebody in favor of customer choice, I hopethe assembly votes for the bill as soon as possible. There is a lotof work that needs to be done in New Jersey and if the bill getscaught up in the legislature, the bill’s timetables are in serioustrouble.”

Many issues would still confront New Jersey’s Board of PublicUtilities (BPU), if the bill wins approval. The bill gives the BPUfull authority to decide the amount of stranded costs, but acommission spokesman said that all parties involved have beenfiling with the board, and that the BPU staff will take thosefilings under advisement. The BPU would also have to decide onutility affiliate code of conduct and metering and billing issuesfor both the gas and electric industries. The utilities would stillprovide transportation and distribution and maintain theresponsibility of being suppliers of last resort.

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